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Professional Indemnity Insurance in the USA

Table of Contents 

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables

 

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

Finaccord’s study breaks down individual country markets into 13 professional categories…

… with a number of other key segmentations also provided

Rationale

This series of reports delivers up-to-date research about a complex, multi-faceted insurance sector…

... with affinity schemes researched in detail through the associated PartnerBASE dataset

Methodology

Survey of professional and trade associations

Survey of brokers and underwriters

Market data

Definitions

Professional indemnity insurance

Professional categories

Operating models

Other notes

PartnerBASE and market data file

Finaccord

2.0 MARKET ANALYSIS

Introduction

Number, growth in number and segmentation of insurable enterprises

The miscellaneous category of other professional sectors is the most heavily populated in the US…

… albeit the number of IT and business consulting enterprises is that which has expanded most rapidly…

… and growth in number of enterprises is most apparent among the largest firms

Market value, growth and segmentation

The total market for professional liability cover has recorded modest growth in recent years…

… having been held back somewhat by a decline in the very large medical malpractice segment

Other than medicine and dentistry, the legal services category generates the highest value of premiums

More than three quarters of all insurable enterprises are likely to have taken out professional liability cover…

… as a result of the advanced culture of litigation that permeates the US

About half of premiums are paid by enterprises with annual fee income or turnover above USD 20 million

Some US states stipulate that medical professionals must secure a minimum level of liability insurance…

...although most professional enterprises are not actually compelled to acquire cover

A significant proportion of the US market is dealt with by non-domestic underwriters…

… and approximately one sixth of total premiums are due to new business

The value of primary layer business is several multiples higher than that of excess layer business

Underwriter utilisation and market shares

Two underwriters are used for professional liability insurance by more than a half of brokers researched…

… and the combination of ACE with Chubb will see it overtake AIG in this analysis

There is a very long tail of small underwriters active in the US market

Even the market leader is unlikely to command a market share of premiums of more than 7%...

… with those outside of the top 15 together accounting for up to 65.5% of the market

Including MGAs and RRGs, there are over 90 underwriters of professional liability cover in total…

… although some international insurers prefer to avoid the US altogether

Berkshire Hathaway and The Doctors Company lead the market for medical malpractice insurance…

… and eight of the top ten underwriters in this sphere are specialists

In non-medical professional liability insurance, Travelers was the probable market leader in 2015…

… although it may be overtaken by the combination of ACE and Chubb in 2016

There are few specialist underwriters focusing purely on architecture, D&B and engineering risks

Affinity schemes with professional and trade associations

Most affinity partnerships with associations are intermediated by a single external broker…

… for which Aon holds the most such relationships

Among scheme underwriters, The Hartford is followed by AIG, Axis, Liberty and Zurich

Other distribution channels

Brokers

Organising professional liability cover is an important activity for numerous brokers…

Direct sales

… albeit few underwriters sell it directly (as opposed to via their agents)

Online aggregators

This type of insurance can also be acquired from online comparison sites

Other affinity partners

… plus a handful of major banks and sports organisations

Market value forecast

A number of factors will drive further growth in premiums through to 2019…

… including the increasing exposure of certain enterprise types to professional risks…

… plus rising claims severity (if not claims frequency)…

… and demand for cyber liability cover among many types of professional enterprise

A compound annual growth rate in premiums of just under 3% is forecast up to 2019


LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY

Number of insurable enterprises and value of professional indemnity insurance in the US, segmented by professional sector, 2015

1.0 INTRODUCTION

Professional associations contacted by Finaccord, segmented by professional category and membership type

2.0 MARKET ANALYSIS

Number of insurable enterprises in the US, segmented by professional sector, 2015

Compound annual growth or decline in number of insurable enterprises in the US, segmented by professional sector, 2011 to 2015

Number of insurable enterprises in the US, segmented by professional sector, 2011 and 2015 (table)

Number of insurable enterprises in the US, segmented by annual fee income / turnover band, 2011 and 2015

Number of insurable enterprises in the US, segmented by annual fee income / turnover band, 2011 and 2015 (table)

Gross written premiums for professional indemnity insurance in the US, segmented by professional sector, 2011 and 2015

Gross written premiums for professional indemnity insurance in the US, segmented by professional sector, 2011 and 2015 (table)

Gross written premiums for professional indemnity insurance in the US, segmented by annual fee income / turnover band, 2011 and 2015

Gross written premiums for professional indemnity insurance in the US, segmented by annual fee income / turnover band, 2011 and 2015 (table)

Gross written premiums for professional indemnity insurance in the US segmented between domestic and non-domestic underwriters, 2015

Gross written premiums for professional indemnity insurance in the US segmented between new business and renewals, 2015

Gross written premiums for professional indemnity insurance in the US segmented between primary and excess layer business, 2015

Percentage of brokers surveyed making regular use of particular underwriters for professional indemnity insurance in the US, 2015

Estimated market shares of underwriters of professional indemnity insurance in the US, 2015

Estimated market shares of underwriters of professional indemnity insurance in the US, 2015 (table)

Estimated market shares of underwriters of medical malpractice insurance in the US, 2015

Estimated market shares of underwriters of medical malpractice insurance in the US, 2015 (table)

Estimated market shares of underwriters of non-medical professional indemnity insurance in the US, 2015

Estimated market shares of underwriters of non-medical professional indemnity insurance in the US, 2015 (table)

Affinity schemes for professional indemnity insurance offered through professional and trade associations in the US: provision rate and operating models, 2015

Affinity schemes for professional indemnity insurance offered through professional and trade associations in the US: broker share of partnerships, 2015

Affinity schemes for professional indemnity insurance offered through professional and trade associations in the US: underwriter share of partnerships, 2015

Gross written premiums for professional indemnity insurance in the US, segmented by professional sector, 2019 (forecast)

Gross written premiums for professional indemnity insurance in the US, segmented by professional sector, 2019 (forecast) (table)

Gross written premiums for professional indemnity insurance in the US, segmented by annual fee income / turnover band, 2019 (forecast)

Gross written premiums for professional indemnity insurance in the US, segmented by annual fee income / turnover band, 2019 (forecast) (table)

 

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